Trump's Call to 'Open Up' North Sea Stirs Energy Debate

President-elect Donald Trump criticized wind power and advocated for increased oil exploration in the North Sea, amidst ongoing declines in regional production. The British government has imposed windfall taxes on oil producers, signaling a shift towards renewable energy. Rising costs challenge the offshore wind sector's growth.

In a controversial statement, U.S. President-elect Donald Trump called for increased oil exploration in the North Sea, denouncing existing wind power developments on his social media platform, Truth Social. Trump's remarks come as the region has seen declining oil production over recent decades, falling from 4.4 million barrels of oil equivalent per day at the millennium's start to just about 1.3 million boed today. The post was a reaction to reports of U.S.-based APA Corp's unit Apache's proposed exit from the North Sea by 2029, expecting a 20% annual decrease in production by 2025.

The British government, meanwhile, has taken steps to bolster renewable energy by raising windfall taxes on North Sea oil and gas producers to 38%. The government hopes to channel funds generated from oil and gas for renewable projects, aiming to decarbonize its power sector by 2030. However, the higher taxes have led North Sea producers to warn about potential investment drops, with some, like Harbour Energy, considering selling their stakes.

Despite significant investment in offshore wind farms in the North Sea by Britain and Europe, the sector grapples with rising costs due to technical challenges, supply chain disruptions, and high-interest rates. The escalating expenses have prompted companies, including the world's largest offshore wind developer Orsted, to reassess their investment strategies.

(With inputs from agencies.)